Launch Date |
UIN |
Status |
22/2/2018 |
101N092V04 |
Active |
About HDFC Life Guaranteed Pension Plan
The HDFC Life Guaranteed Pension Plan is a non-participating deferred pension plan that provides assured benefits at the event of death or at the end of the vesting period (the vesting period is the period before the benefits in a retirement plan are unconditionally owned by an employee). The plan proves to be an ideal option for individuals who are looking for investment options that secures their retirement and provides guaranteed post-retirement income.
Let us understand this plan in brief before getting into its details.
Modes of Payment
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- Yearly
- Half-yearly
- Quarterly
- Monthly
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Claim Settlement Ratio of the Insurer
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97.62%
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USPs of the Policy
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- The plan offers guaranteed additions of 3% on vesting on completion of each and every policy year
- A lump sum vesting addition will be paid at the time of vesting
- Freedom to choose Premium Paying Term (PPT) of 5, 7, and 10 years
- The plan offers guaranteed death benefits equal to total premiums paid to date accumulated at 6% per annum
- Applicable tax benefits can be availed as per Section 80(CCC) and 10(10A) of the Income Tax Act
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Bonus Rate
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Guaranteed additions/bonus is offered on the percentage of sum assured on vesting according to the policy term
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Illustration with Premium of INR 1 Lakh
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- If a 35-year-old individual opts for this plan at annual premium of INR 1,00,000 for PPT of 10 years and policy term of 20 years, and if the policyholder survives until the vesting date, then s/he stands to get a guaranteed benefit of INR 20,36,921.
- Based on the total vesting benefit, the annuity payable on 4% is INR 91,458 (per annum) and on 8% is INR 1,62,974 (per annum).
- If the policyholder dies before the vesting date, benefits will be paid according to the policy year s/he died in. For instance, if the policyholder dies on the 10th year of the policy term, then s/he will get guaranteed benefit of INR 14,25,624.
- If the policyholder wishes to surrender his policy on the 10th year of the policy term, then s/he receives guaranteed surrender value of INR 6,68,663 and non-guaranteed benefit of 3,66,704. Therefore, the policyholder receives a total surrender benefit of INR 10,35,367.
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How Does the Plan Work?
- The individual chooses his/her vesting age, that is, the age at which s/he wants to retire.
- Based on his/her retirement needs, the individual chooses the premium amount as well as the period for which he wants to pay premiums (PPT).
Now, let us understand the other aspects of this plan with the help of various benefits offered by this plan:
- Guaranteed Benefits: The plan offers guaranteed additions of 3% on vesting on completion of each and every policy year
- Vesting Addition/Bonus: Guaranteed addition/bonus is offered on the percentage of sum assured on vesting according to the policy term
- Vesting Benefits: If the insured individual survives till the chosen vesting date and has paid all the premiums on time throughout the PPT, then the individual is qualified to receive the following benefits:
- Sum assured on vesting
- Guaranteed additions
- Vesting addition
- Death Benefits: In case of unexpected death of the insured individual, the nominee receives an assured death benefit of total premiums paid to date accumulated at a guaranteed rate of 6% compounded annually. The death benefits will be subject to the following:
- The minimum death benefit at all times will be 105% of the premiums paid
- The nominee of the insured individual has an option to receive either annuity from death benefits fully or partially or by withdrawing the entire death benefit as a lump sum
Why Should I Buy This Plan?
Along with the benefits mentioned earlier, there are various other reasons why you must buy this plan. Some of them are mentioned here:
- Tax Benefits: Premiums paid under the plan would be exempt from tax under Section 80(CCC) and the benefits received will fall under Section 10(10A).
- Free-look Period: The individual is advised to go through the policy thoroughly. If s/he finds any objections to the terms and conditions of the policy, s/he can cancel the policy within 15 days (the free-look period) by giving a signed written notice to the insurance company stating the reasons for objection of the policy along with the original policy document. Only then will the individual be entitled to a refund of the premium paid, excluding stamp duty charges.
- Grace Period: The plan provides a grace period of 30 days from the due date of unpaid premium in case of yearly, half-yearly, and quarterly payment mode and 15 days for the monthly mode in which the payment of premium without interest will be allowed. During the grace period, the policy shall continue to be in force for all the insured events.
- Revival:
If the policy is not surrendered, it can be revived within 2 years from the last unpaid premium date. Revival fee of Rs 250 will be charged.
- Guaranteed Surrender Value:
Surrender value will be applicable only if the policyholder has paid premiums of the first 2 years (if PPT is of 5 or 7 years) or first 3 years (if the PPT is of 10 years) of the plan.
- Nomination:
The nomination facility is permitted before the policy matures as per Section 39 of the Insurance Act, 1938.
- Assignment:
The insured individual is enabled to assign his/her policy to a party by submitting a notice in writing to the insurance company as per Section 38 of the Insurance Act, 1938.
Who Should Buy This Plan?
Those who fall within the age bracket of 35 to 65 years can opt for the plan. This plan helps policyholders get a guaranteed and steady post-retirement income.
Riders
No riders are available with this plan.
HDFC Life is a joint venture between HDFC Limited and Standard Life plc, one of the leading financial service providers from UK. The company offers a wide range of individual and group insurance products to meet the various financial needs of customers.